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Facts
The Assessing Officer initiated reassessment proceedings against the assessee for AY 2013-14 based on information about share trading aggregating Rs. 4.48 crore, believing income had escaped assessment. The assessee did not file a return initially, and later filed a return on the same day the reassessment order was passed, declaring Nil income and a loss. The AO passed a best judgment assessment order under Section 144 read with Section 147, making an addition of Rs. 4.48 crore.
Held
The Tribunal found that the assessee did not adhere to the procedure for filing the return of income in time nor raised objections against the reopening. The assessee's ground regarding the non-issuance of a notice under Section 143(2) was dismissed as the return was filed on the same day as the assessment order. The assessee's contention that the reassessment order was passed without jurisdiction and proper opportunity was also not found to have merit.
Key Issues
Whether the reassessment order passed without proper jurisdiction and opportunity, and without issuing mandatory notices under Sections 143(2) and 144B, is valid. Whether the assessee's failure to file the return in time and raise objections prejudiced the AO's assessment.
Sections Cited
147, 144, 144B, 124, 143(2), 142(1), 148, 69A, 271F, 271(1)(c), 271(1)(b), 250
AI-generated summary — verify with the full judgment below
PER PAWAN SINGH, JUDICIAL MEMBER:
This appeal by assessee is directed against the order of ld. CIT(A) / NFAC dated 07.10.2024 for A.Y. 2013-14. The assessee has raised following grounds of appeal:
“I. Reassessment order passed by the Jurisdictional Assessing Officer without jurisdiction:
1.1 On the facts and in the circumstances of the case and in law, the National Faceless Appeal Centre (hereinafter referred to as ‘the NFAC’) failed to appreciate that reassessment order dated 24th September, 2021 passed under section 147 read with section 144 of the Income tax Act,1961 (hereinafter referred to as ‘the Act’) by the Jurisdictional Assessing Officer (hereinafter referred to as ‘the JAO’) is in complete breach of the provisions of the Faceless Assessment as provided section 144B of the Act hence, is ex- facie illegal, untenable, unsustainable in law and without jurisdiction. 1.2 On the facts and circumstances of the case and in law the NFAC failed to appreciate that –
(i) the JAO had no jurisdiction and passed the reassessment order dated 24th September 2021; and (ii) the reassessment order ought to have been passed by the National Faceless Assessment Centre as per the provisions of Faceless Assessment under section 144B of the Act.
1.3 On the facts and in the circumstances of the case and in law the NFAC erred in holding that, the issue of jurisdiction raised by the Appellant is barred by the provisions of section 124 of the Act.
WITHOUT PREJUDICE TO THE ABOVE :
II. Re.: NOTICE U/S.143(2) NOT ISSUED.
2.1 The NFAC failed to appreciate that the reassessment order was passed by the JAO without issuing notice under section 143(2) of the Act.
2.2 The NFAC failed to appreciate that - the Appellant had filed her return of income on 24th September 2021;
- as the Appellant had filed her return the JAO ought to have issued the mandatory notice under section 143(2) of the Act before passing the reassessment under section 144 read with section 147 of the Act.
1.3 In the fact and circumstances of the case and in law reassessment order passed without issuance of notice under section 143(2) of the Act is bad in law and liable to be quashed
WITHOUT FURTHER PREJUDICE TO THE ABOVE:
III. No draft assessment order passed under section 144B(1)(xiv) of the Act.
3.1 On the facts and in the circumstances of the case and in law the NFAC erred in not adjudicating the ground raised before it that the JAO erred in passing the final assessment order dated 24th September 2021 under section 147 r.w.s. 144 of the Act without complying with the mandatory requirements of section 144B(1)(xiv) of the Act which requires the JAO to first pass a draft order.
3.2. It is prayed that as the provisions of section 144B(1)(xvi) of the Act are not complied with, the reassessment order passed by the JAO is bad in law and liable to be quashed
WITHOUT FURTHER PREJUDICE TO THE ABOVE:
IV. Best judgment Assessment under section 144 of the Act:
4.1 On the facts and in the circumstances of the case and in law the NFAC erred in upholding the order dated 24th September 2021 passed under section 144 of the Act under best judgment assessment.
4.2 While doing so, the NFAC failed to appreciate that:
(i) The necessary conditions for invoking the provisions of section 144 of the Act were not fulfilled;
(ii) as per notice dated: 13th September 2021 issued under section 142 (1) of the Act the Appellant was directed to file her response by 28th September 2021;
(iii) that the Appellant had filed the detailed reply on 24th September 2021 as well as her return of income, however, the JAO without considering the same had passed the reassessment on 24th September 2021.
V. LIBERTY:
The appellant craves leave to add, alter, delete or modify all or any of the above ground at the time of hearing.”
Brief facts of the case are that assessee has not filed return of income, the assessing officer has information that assessee traded into share transaction aggregating of Rs. 4.48 crore. On the basis of such information, the assessing officer was of the view that income of assessee has escaped assessment. The assessing officer after recording reasons issued notice under section 148 dated 18.02.2020. The assessing officer recorded that no compliance was made in response to notice under section
The assessing officer further recorded that assessee was given final opportunity vide notice dated 17.09.2021 to furnish requisite detail called earlier, failing which assessment shall be completed under section 144. The contents of show cause notice is recorded in para 4.1 of assessment order.
The assessing officer recorded that no details were furnished. The assessing officer accordingly passed assessment order under section 144 on 24.09.2021 and added Rs. 4.48 crore on account of unexplained share trading and added under section 69A. The assessing officer initiated penalty under section 271F, penalty under section 271(1)(c) for concealment of income as well as penalty under section 271(1)(b) for non- compliance of various notices.
Aggrieved by the additions, the assessee filed additions in the assessment order, the assessee filed appeal before ld. CIT(A). Initially, the assessee challenged the addition on merit. However, the assessee filed additional / revised ground of appeal by taking legal objection that assessment order was passed without having jurisdiction and no draft assessment order was passed as required under section 144B(1)(xiv). The assessee also objection on the ground that no fair and proper opportunity was given. The assessee apart from filing written submission also filed detail statement of facts before ld. CIT(A). Before ld. CIT(A), the assessee stated that she is an individual and filed return of income on 24.09.2021 declaring Nil income.
The assessee disclosed income from banks in F&A share trading and intraday trading, other sources and capital gain as source of income. The assessing officer wrongly added entire amount of Rs. 4.48 crore as income which was available in the ITBA portal. The assessee could not make any compliance before assessing officer due to severe health issues and entire family was suffering from infection from Covid - 19. The assessee undergone a medical surgery in August 2021 and advised bed rest. No statutory notices were issued. There were losses in the share trading and there was no taxable income. All details asked by assessing officer were furnished online on 24.09.2021. In response to show cause notice by ld. CIT(A) under section 250, the assessee also furnished written submission almost on similar lines as submitted earlier. The assessee furnished copy of return of income, computation of income, details of Demat account, bank statement and details of working of net capital loss or gain and the investment made during the year. The assessee stated that she filed return of income for A.Y. 2013-14 on 24.09.2021 declaring loss of Rs. 17,42,262/-.
The ld. CIT(A) on considering the submission of assessee recorded that assessment was completed under section 144. The assessee has raised a various grounds of appeal. By referring the provision of section 124(3), the ld. CIT(A) held that assessee has could challenged the jurisdiction of ld. AO within 30 days from the service of notice under section 148. No such objection was raised by assessee. Thus, not eligible to raise such objection.
However, legal issues that notice under section 143(2) was not issued, the ld. CIT(A) held that return of income is not filed in response to notice under section 148, therefore, assessee’s objection has no force. On merit, the ld. CIT(A) recorded that assessee filed return of income on last date of hearing that is on 24.09.2021. The assessee submitted certain details and return of income. But such details were not seen by assessing officer was framed. Considering the fact that assessment was completed ex-parte, the ld. CIT(A) restored the matter back to the file of assessing officer to frame assessment order afresh after giving opportunity of hearing to the assessee. Further aggrieved, the assessee has filed present appeal before Tribunal.
We have heard the submissions of learned Authorised Representative (ld.
AR) of the assessee and the learned Senior Departmental Representative (ld. Sr. DR) for the Revenue. The ld AR of the assessee made statement that she is not pressing ground No. IV of appeal. Considering her statement ground No IV of the appeal is dismissed as not pressed. No specific submissions were made on Ground No. I & III, hence, such grounds of appeal are treated as not pressed. On the other grounds of appeal, she made her submissions on the similar lines as per the submissions made before ld CIT(A). The ld AR for the assessee submits that before completion of assessment the AO has not issued notice under section 143(2) which is mandatory. Hence, the assessment order is bad in law.
6. On the other hand, the ld Sr DR for the revenue submits that as per record and finding of the ld CIT(A), the return of income was filed only on 24.09.2021. The assessment order was also passed on 24.09.2021. it is not practically possible for AO to verify each day, if return of income is filed or not. The return of income is not filed as per the time allowed in the notice under section 148.
7. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities. We find that ld CIT(A) while deciding the appeal of assessee has restored the matter back to the file of AO to pass assessment order after following due process of law. So far as specific objection of the assessee is concerned, we find merit in the submissions of ld Sr DR for the revenue that the assessee has filed return of income only on 24.09.2021, i.e. day on which assessment order was passed. The assessee neither adhered to the procedure for filing return of income in time nor raised any objection against the reopening. Hence, we do not find any merit in the submissions of ld AR of the assessee. Hence, ground No. II of the appeal is also dismissed.
In the result, appeal of the assessee is dismissed
Order was pronounced in the open Court on 31/12/2025.